New Delhi. Tariffs have increased inflation in America and its impact can be clearly seen on the common American. But, President Donald Trump, who calls tariffs a panacea for all ills, is not accepting this truth. Now Trump has given a new lollipop to Americans. Trump has said that the country is collecting huge revenue from tariffs. Therefore, in the coming years, income tax can be greatly reduced or completely eliminated. Earlier, Trump had also announced to give a tariff dividend of 2000 dollars to every American. However, he has not told how and who will get this dividend.
According to a Reuters report, while talking to US Army soldiers on video call, Trump said, “In the next few years, we will reduce the income tax significantly, maybe even remove it completely. Because our earnings from tariffs are going to be so high that we will not have to depend on income tax.” However, he did not explain how this scheme would be implemented and how the government would maintain the balance of revenue.
At present, America imposes taxes by adopting the Progressive Federal Income Tax System. Tax is imposed by dividing the remaining income after deducting deductions and exemptions from the total income of the income tax payer. America has 10%, 12%, 22%, 24%, 32%, 35% and 37% tax slabs.
Indications were given earlier also to reduce income tax
This is not the first time that Trump is claiming to reduce income tax. Earlier in April too, he had written on the social media platform ‘Truth Social’ that after the imposition of the tariff, the income tax of many Americans may be significantly reduced and those whose income is less than 2 lakh dollars will get the biggest benefit from it.
Strategy to increase revenue with the help of tariff
After returning to the White House, Trump imposed heavy tariffs on many countries, which included taxes ranging from 10% to 50% on imported goods. Different rates have been applied on products coming from different countries. Trump claims that tariffs will increase the income of the US government manifold, demand for local products will increase and employment and manufacturing in the economy will get a new impetus.
How much is income tax in America?
The US federal income tax system is on a progressive structure. This means that after deducting standard deduction and other exemptions from the total taxable income of the income tax payer i.e. gross income, the remaining income will be divided into different parts and taxed at different tax rates. Seven tax rates for tax year 2025 have been set at 10%, 12%, 22%, 24%, 32%, 35% and 37%.
